African businesses ditch cash-based B2B payments, says Duplo research

Yele Oyekola, Chief Executive Officer and co-founder at Duplo

A report that includes the surveyed opinions of over 1,000 business owners from Kenya, Nigeria, South Africa and Egypt has revealed ease of use, reliability and speed as the preferred features for African businesses when it comes to B2B payment methods. 

The State of B2B Payments in Africa report, compiled by Duplo, a business payment platform for African businesses, revealed that bank transfers are the most common medium for payments between businesses today, more common than cash, cheques and mobile money.

What were the findings of Duplo’s study?

When asked what they liked about their current payment methods, 29% of surveyed respondents chose ease of use, 28% of respondents chose reliability and 18% chose speed. More than digitised processes (10%), affordability (10%) and customisation (5%).

When asked which methods their companies used for making payments to other businesses, 85% of respondents chose bank transfers as one of the ways they made payments, compared to 60% for cash, 23% for cheques and 17% for mobile money. When asked about receiving payments from other businesses, 62% said they received payments via bank transfers, compared to 59% for cash, 32% for cheques and 15% for mobile money. 

The transition from cash-based transactions highlighted represents a major shift in business behaviour, with cash payments historically dominating B2B payment on the continent. The findings suggest that beyond the clamour for digitised payments, African businesses want payment processes that are efficient, rather than digital payments just for the sake of it. 

The report also highlighted that 44% of businesses still have to wait more than 24 hours to receive payments from business stakeholders. 34% take up to 7 days to receive payments, 17% take up to 30 days and 3% take over 30 days to receive payments. This presents a significant challenge for businesses who are often unable to maximise the opportunities available to them due to cash flow restrictions induced by complex payment flows.

What is the landscape of B2B payments on the continent?

According to the World Bank, B2B payments in Sub-Saharan Africa represents a $1.5 trillion market. However, the process of making and receiving payment remains largely manual, which makes it highly inefficient for businesses. Invoices are also not standardised and they are typically issued and received manually, which increases the administrative burden on business owners, taking more time and effort that can be invested into their businesses. 

Commenting on the findings of the report, Yele Oyekola, CEO and co-founder of Duplo, said, “African businesses, large and small, are the lifeblood of the continent’s economy, and making it easier for more to flow between them should be a priority. The data from the report shows a much-needed transition from cash-based payments but that is just the beginning.”

“There are various challenges in the payment process that make it difficult for businesses to maximise opportunities to scale operations. We need to innovate to more effectively position businesses for the growth they need to power economic growth on the continent,” Yele said.

The State of B2B Payments in Africa is available to download for free on Duplo’s website